El Salvador Will Exempt Bitcoin Tax For Foreign Investors

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2021-09-14 21:32:07

According to a government legal adviser, foreign investors will be exempt from tax on their Bitcoin profits in El Salvador.

El Salvador Will Exempt Bitcoin Tax For Foreign Investors

The government of El Salvador shared that foreign investors will be exempt from tax on profits derived from Bitcoin. A government adviser revealed on September 10, this is a development aimed at encouraging entrepreneurs and investors to join the country.

Speaking to AFP, Javier Argueta, legal adviser to President Nayib Bukele, said:

“If a person has assets in Bitcoin and makes a profit, they will not have to pay taxes. This is (done) obviously to encourage foreign investment.”

Argueta also said the country is working with international agencies to implement compliance measures. Global organizations such as the International Monetary Fund (IMF) have highlighted traceability and prevention of illicit financial activities as key concerns.

The ratification of Bitcoin as legal currency, although still in its early days, is proving to be problematic for the country. There has been criticism from all sides, from the opposition party to global organizations around the world. However, the government was undeterred by this resistance.

Chivo Wallet, which is El Salvador’s official bitcoin wallet, was launched on September 7, with 30 USD BTC donated to users in this country. The government bought 400 bitcoins in preparation for the above change.

It remains to be seen how the change will play out in the medium to long term. Critics have listed a number of issues, with volatility being the number one concern. The country’s internal ministers drew attention to this, saying that pay could be affected by the volatility.

Bitcoin adoption in El Salvador is full of ups and downs

The consensus on El Salvador’s decision is a true roller coaster ride. This is a first move for Bitcoin and many are curious to see how it will play out on such a large scale. The next 12 months will be an important period to see what role bitcoin plays in the country’s economy.

People inside the crypto world have made their own decisions on the matter. Charles Hoskinson, Founder Cardano, CEO of Input Output Hong Kong (IOHK), said that every country needs a Bitcoin strategy. He praised El Salvador’s decision and went as far as to say that “Nothing in human history has evolved so quickly“.

But of most concern is the fact that citizens are taking to the streets to protest the move. The wallet seems to be working as intended, although there have been some hiccups with the ATMs. A group of citizens also filed a lawsuit against the government, the most serious move to date.

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